Congressional pay could rise in 2013

Lawmakers could earn slightly more money in 2013 if they decide to follow President Obama's recommendation and lift the two-year pay freeze on federal employees.

Congress likely will vote against giving itself a pay raise in 2013, as it has done since 2009. But if lawmakers don't do that and decide to lift the pay freeze, then they too are eligible for a small bump based on the current formula, which links congressional and federal employees' pay. Obama's fiscal 2013 budget is expected to include a 0.5 percent pay raise for government workers, although it's unclear whether Congress will approve that given the political and fiscal environments.

Lawmakers' annual pay adjustments cannot exceed the annual base pay adjustments of General Schedule employees. When Congress approved a two-year pay freeze for government workers beginning January 2011, it effectively froze its own pay. Unlike the increases for federal workers, lawmakers' pay adjustments take effect automatically unless Congress prohibits it. The 1989 Ethics Reform Act created the current formula, which is based on changes in private sector wages as measured by the Employment Cost Index.

The Bureau of Labor Statistics will release data at the end of January that will project the 2013 pay adjustment for lawmakers. "The adjustment takes effect unless denied statutorily by Congress or limited by the General Schedule base pay adjustment," said a new Congressional Research Service report. Lawmakers could have received a salary boost of 1.3 percent in 2012 under the ECI formula if they were not limited by GS pay, which is frozen. The annual base salary for members of Congress is $174,000 which is the amount it has been since 2009, when lawmakers received a 2.8 percent pay hike. That year, federal workers received a 3.9 percent pay raise, which included a 2.9 percent base pay increase, plus a 1 percent locality pay bump. Lawmakers do not receive locality pay.

The House in December 2011 approved a payroll tax cut extension bill that included a provision that freezes federal and congressional pay for another year. The Senate's version of that legislation did not include any federal pay-related provisions. House and Senate conferees the week of Jan. 16 will begin hammering out the details of extending the payroll tax holiday from two months to a year, and the final deal could include some kind of federal pay freeze to finance the tax cut.

Lawmakers also could decide to lift the pay freeze on federal workers while at the same time denying themselves a salary increase, which they have done in the past.